Growth row as economy stagnates - The Sun

DEPUTY PM Nick Clegg sparked a storm over the economy yesterday - as figures showed the UK was close to stagnation.

He admitted on a visit to Yorkshire that plans to boost growth there may not "come quickly enough" to offset job losses caused by public sector cuts.

Mr Clegg said: "There is a fair point about timing here." Gleeful Labour MPs leapt on the comments to claim once again that the Coalition's brutal cuts were going "too far and too fast".

Sources close to Mr Clegg insisted Labour had taken his remarks out of context.

The row erupted as official figures confirmed the economy grew at an anaemic 0.2 per cent between April and June.

In the US, growth figures for the same quarter were cut to just 0.25 per cent. US Federal Reserve chairman Ben Bernanke held off from launching a new round of quantitative easing - which would effectively have printed billions more dollars.

He said: "This economic healing will take a while. There may be setbacks on the way."

Economists said the risks of a devastating double-dip recession were growing.

Two investment banks slashed forecasts for the UK and the rest of the world on Thursday. Economist Andrew Goodwin said yesterday: "This recovery is going to be a long, hard slog."

steve.hawkes@the-sun.co.uk